Would You Do Business With You?
If more company presidents and their senior managers asked
themselves this question, taking the view of their customers, many would
answer "probably not." The reason? Customer service.
Much has been said, done, and written about customer service
during the last decade. Millions of dollars have been spent on programs,
training and systems. However, the results have been disproportionate
and often outright disappointing.
In a recent issue of Fast Company magazine, the cover
story declared "Betrayed! The biggest lie in business
is 'the customer is in charge'… How could an idea so right go so
wrong?" But surely, you may say, every company wants to delight
its customers? That may be true, but although bold promises have been
made, bad results have been the reality. The issue is not that service
is poor. The real issue is that the promised and necessary great
service is harder to deliver than ever!
Michael Hepworth, in a Canadian Marketing Association publication,
provides some facts in support of the Fast Company report:
- The American Customer Satisfaction Index (University
of Michigan Business School) stood at 74 in 1994, dipped to 71 in 1997
and has only slowly recovered to 73 in 2000.
- Only one in three customers who have a problem and contact
the organization for help are satisfied with the response they get.
Customers who contact an organization for help and are dissatisfied
with the response are 30 to 40% less loyal.
- The average North American company has 11% of its revenue
at risk as a result of customer problems and the way they are handled.
- $1 spent on advertising yields less than $5 in incremental
revenue, but that same $1 spent on improving customer service can yield
over $60 in incremental revenue.
And the need for customer service in the new economy is
as great as in the old:
- 75% of all e-shopping carts are abandoned before the
purchase is actually complete. Nine out of ten shoppers who abandoned
their carts, did so because of a lack of customer service.
- 72% of respondents said that customer service is critical
in shopping satisfaction. Less than 1% of all e-commerce web sites offer
live customer assistance.
- Up to 30% of internet users require human intervention
before purchasing on the web.
So what are companies doing to resolve this issue? Today
too many company leaders spend their time and resources looking for magical
technology solutions. I call this "The Great System Seduction."Since
we live in an age of "real time" and "1-to-1 marketing,"
the Customer Relationship Management (CRM) Systems business is burgeoning
. However, a good system does not equal good service. The European Centre
for Customer Strategy predicts that future CRM effectiveness will be assessed
less through hard measures and more through the stories people tell about
a company. This means companies must give the customer distinctive service
experiences so they will become advocates, telling stories to their friends
and colleagues. Only if your people are 'turned on' will you generate
such legends!
The disappointing reality is that the human element is frequently
overlooked at the expense of the systems challenges. Enduring and
real customer service success requires a passion for people–both
employees and customers. Author Jim Clemmer observes that "Too
many managers treat 'their people' as assets with skin wrapped around
them." The flip side, as expressed by Debra Fields,
President of the highly successful Mrs. Fields Cookies, is that "Customer
service does not come from a manual or a system… It comes from the
heart. When it comes to taking care of the customer you can never
do too much and… there is no wrong way if it comes from the heart!"
In other words, we need a balance between managing things
from the head, and leading people from the heart. While rational
strategy is essential, emotional intelligence accounts for as much as
70% of the personal and organizational success factor.
The fundamental problem is that most business leaders are
not "pathological" about customer service and do not believe
passionately in it as a key differentiator. One of my clients (a
President, who used the word "pathological" in his communications
and speeches about customer service), was successful in making service
excellence happen and royally reaped the commercial benefits. He did not
just make the rational strategy case for it, but he lived it from his
heart. Unfortunately there are too few leaders like that.
For many, the distance between head and heart is far greater than the
typical 16 inches… and therein lies the root cause of customers'
continuing disappointment with the service they receive.
But, if the customer is king, why are so many companies
still behaving like republicans instead of royalists? There is often
misalignment between the people and the systems in place to manage them.
The challenge for today's business leaders is to put their people front
and centre; to pursue short-term results while continuously aligning
technology, work processes, and structure around the people to
enable them to become customer-focused in all aspects of operation. After
all, a sharper customer focus means a sharper competitive edge.
There are two lessons in this: 1) More organizations
need to think more and harder about the people factor in customer service,
and 2) They must also pay fanatical attention to managing each customer
touch-point ('Moment of Truth'). This is serious and hard
work. Being "pathological" about customer service demands passion
from leaders. They must be prepared to walk the talk, be patient, pay
attention to customer detail, and constantly work on people- and customer-focussed
alignments. Only then, when they have become "pathological"
about customer service, will business leaders truly be able to say "Everyone
wants to do business with me."
Eric Fraterman is a customer-focus consultant in Toronto.
He can be reached at: eric@customerfocusconsult.com
Phone: (416) 944-1898
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